Mark Tibergien is surely right when he says that the time to start focusing on younger clients, and refocusing from exclusively serving baby boomers, is yesterday or maybe last week--and Pershing has a report that offers some additional insights. Bob Clark is surely right that many advisors are not communicating as authentically as clients would like them to, and Angie Herbers feels your stress level. I also liked Steve Weydert's guest column, which suggests that there might actually be a real difference between the services offered by fiduciary RIAs and brokers employed by the wirehouses.
These are really good practice management pieces, and Dan Skiles and Tom Giachetti add weight to the mix. So why is the magazine's own coverage of practice management--evidenced in the cover story in this issue--so... less good? They assembled a terrific group of panelists, but the result is disappointing, especially in light of the impossible-to-live-up-to buildup. Ah well....
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Media Reviews
MEDIA REVIEWS - August 8-15, 2012
This is interesting: there is now a software program that helps you estimate future health care costs using actuarial data--an input that is missing from most financial plans these days. Meanwhile, Roy Diliberto is concerned about how planners are portraying their profession's image to the press, and anybody who has read articles about financial planners in the consumer print and broadcast media knows exactly what he's talking about.
The cover story offers some general principles for success in the advisory profession, and you find yourself wishing they were far more specific. But it's not a bad checklist, and Eleanor Blayney's column about how best to work with women clients has its own checklist for you. [Read more »]
The cover story offers some general principles for success in the advisory profession, and you find yourself wishing they were far more specific. But it's not a bad checklist, and Eleanor Blayney's column about how best to work with women clients has its own checklist for you. [Read more »]
MEDIA REVIEWS - August 1-7, 2012
Deena Katz has experienced end-of-life planning first-hand, and reports some of what she learned--potentially very helpful for advisors who have not been in that particular trench themselves. We get a VERY brief description of a new and growing group of online advice providing services that could someday disrupt the pricing models of the planning profession, and the magazine profiles the Pro Bono Planners of the Year. I liked the profile of Lesley Brey in Honolulu, but would have liked to know more (this is typical of my feeling after magazine profiles of advisors), and Joel Bruckenstein test drives the $8,000 Zephyr Style-Advisor software.
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MEDIA REVIEWS - July 23-31, 2012
For me, the highlight of this issue of the Journal of Financial Planning is the survey of brokers in various states, some of which require fiduciary behavior toward clients some not, which shows that there is no statistical difference in how difficult it is for brokers who follow a wirehouse business model to serve their customers.
This, of course, refutes the primary argument put forth by the insurance and brokerage industry lobbyists, who say that they simply could not serve their customers, and therefore people would be without the great advice they provide, if fiduciary became the law of the land for all who give advice. It's a perfect rebuttal that ought to be read by members of Congress and senior policymakers at the SEC.
The other really good article shows that stable value funds and deferred annuities have hidden risks which are not easily measured by the standard deviation--in fact, the article tries to map those hidden risks to a standard deviation number, with mixed results. The point is a good one, but the number of variables makes the translation process a bit difficult.
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This, of course, refutes the primary argument put forth by the insurance and brokerage industry lobbyists, who say that they simply could not serve their customers, and therefore people would be without the great advice they provide, if fiduciary became the law of the land for all who give advice. It's a perfect rebuttal that ought to be read by members of Congress and senior policymakers at the SEC.
The other really good article shows that stable value funds and deferred annuities have hidden risks which are not easily measured by the standard deviation--in fact, the article tries to map those hidden risks to a standard deviation number, with mixed results. The point is a good one, but the number of variables makes the translation process a bit difficult.
[Read more »]
MEDIA REVIEWS - July 16-23, 2012
I think everybody, especially including members of Congress and anybody with oversight over the regulatory budget, should read Brian Hamburger's column in this month's issue of Financial Advisor magazine. It points out what we have seen but not really talked about for years: the fact that the SEC has been toothless and cozy with the largest brokerage firms in its regulatory activities, while bringing the hammer down on individual advisors for far smaller transgressions than you see in the wirehouse world. The cozy relationship with Wall Street allowed the 2008 meltdown and Bernie Madoff. Is this not something that needs fixing?
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MEDIA REVIEWS - July 8-15, 201
What does "best execution" mean, and how do you determine whether you're getting it? Tom Giachetti provides a plausible answer. Angie Herbers tells us that the number one challenge is not creating a successful practice; it is dealing with success once it is achieved--which is apparently a rare skill. Melanie Waddell reports that the Government Accounting Office apparently believes that the SEC has not been exactly diligent in its oversight of FINRA--and a cynic might not expect that to change much under the SEC leadership of Mary Schapiro, who was previously the CEO of FINRA. Mark Tibergien makes a case that should be obvious but is not: that women do not represent a client niche, and are, in fact, a member of the same species as men.
The article by Spenser Segal and Jamie Green looks meatier than it actually is, but it makes some interesting points. Custodians, platforms and back offices are increasingly going to be offering practice management services to their advisor clients as the differentiator of the future, as their clearing and back office activities become commoditized. But those firms currently have no clear way to measure the effectiveness of their value-added services.
[Read more »]
The article by Spenser Segal and Jamie Green looks meatier than it actually is, but it makes some interesting points. Custodians, platforms and back offices are increasingly going to be offering practice management services to their advisor clients as the differentiator of the future, as their clearing and back office activities become commoditized. But those firms currently have no clear way to measure the effectiveness of their value-added services.
[Read more »]
MEDIA REVIEWS - July 1-7, 2012
Glenn Kautt shares his succession planning journey with us, and I think it's enlightening--right up to the moment when we fail to learn how the finances are going to work on his ultimate solution. And Allan Roth gives a profile of the new Morningstar fund evaluation system--which looks prospectively at the prospects of higher than average returns. You read this and wonder why nobody else has been writing about this interesting new way to evaluate the fund universe.
And Joel Bruckenstein does his usual thing, which is letting us know about new software on the horizon. If there is eventually a major disruptive influence in the planning profession, coming from the world of technology, Bruckenstein's column will be the first place you'll hear about it. Here, he talks about a new retirement income optimization program that allows advisors to work, profitably, with middle-income retirees who want to know how much, and how, they can take money out of their portfolios.
[Read more »]
And Joel Bruckenstein does his usual thing, which is letting us know about new software on the horizon. If there is eventually a major disruptive influence in the planning profession, coming from the world of technology, Bruckenstein's column will be the first place you'll hear about it. Here, he talks about a new retirement income optimization program that allows advisors to work, profitably, with middle-income retirees who want to know how much, and how, they can take money out of their portfolios.
[Read more »]
MEDIA REVIEWS - June 24-30, 2012
Perhaps the most tiresome claim I hear in the planning space comes when people say that financial planning needs to incorporate "economic" principles--meaning, often, that we need to incorporate the economic assumptions that people working at universities do when they figure out how the markets work. Most of us know that these are not exactly workable with actual living, breathing clients, but Paula Hogan offers perhaps the best case I've heard for letting the Ivory Tower people get involved with financial planning. The gist of it is that human capital is an asset to be managed just like the portfolio, and those with volatile careers (human capital assets) should have a different asset allocation than those whose careers make them living bonds. People who want more economic input into planning also seem to think stocks are much riskier than advisors do (at least in the long term) and have a great fondness for life annuities and structured investment products. Hogan makes this plausible.
Elsewhere, close readers of this newsletter know what Jerry Miccolis, of Brinton-Eaton, thinks about black swan risk and know is solution: to have, somewhere in your portfolio, a structured investment product that buys long and sells short the volatility of the stock market. When the market becomes dramatically more volatile, the investment spikes; under normal conditions, it generates a bond-like return. [Read more »]
Elsewhere, close readers of this newsletter know what Jerry Miccolis, of Brinton-Eaton, thinks about black swan risk and know is solution: to have, somewhere in your portfolio, a structured investment product that buys long and sells short the volatility of the stock market. When the market becomes dramatically more volatile, the investment spikes; under normal conditions, it generates a bond-like return. [Read more »]
MEDIA REVIEWS - June 15-23, 2012
None of the "high" relevancy articles in this issue of Financial Advisor will rock your world, but Roy Diliberto offers some insights into how to create a more functional office, saying many of the same things that Angie Herbers has been talking about in her Investment Advisor column. Joni Youngwirth gives you a quick primer on becoming your firm's acting CFO, and there are some nuggets in the roundtable hosted by Evan Simonoff at the latest Tiburon meeting.
[Read more »]
MEDIA REVIEWS - June 8-15, 2012
I think it might be time to call the financial journalistic community's attention to the fact that, whenever you interview the executives at the larger independent broker-dealers, every single time, they are going to say that you need scale to survive in this business, and that the days of the smaller BDs are numbered. They have always said that, and it has never before been true, and we won't know if it is true now unless somebody interviews the executives at those smaller competitors to get their view of things.
This comes up because we are hearing a familiar conclusion in the lead article to Financial Planning magazine's 2012 broker-dealer survey, which is otherwise the best of the lot, with year-over-year growth or decline numbers (it would be nice to see longer-term trends, and the magazine does have the data) in a variety of categories, plus payout grids, and some data on smaller BDs included, although the fact that it is in the back of the report still makes those organizations look like second-class citizens.
You might also look at Alan Roth's evaluation of the muni bond market; the conclusion is that we won't know whether some of those bond issuers are truly solvent for ten years, but in the meantime munis and market returns are suddenly linked in a way that they never were before. It's an interesting analysis.
[Read more »]
This comes up because we are hearing a familiar conclusion in the lead article to Financial Planning magazine's 2012 broker-dealer survey, which is otherwise the best of the lot, with year-over-year growth or decline numbers (it would be nice to see longer-term trends, and the magazine does have the data) in a variety of categories, plus payout grids, and some data on smaller BDs included, although the fact that it is in the back of the report still makes those organizations look like second-class citizens.
You might also look at Alan Roth's evaluation of the muni bond market; the conclusion is that we won't know whether some of those bond issuers are truly solvent for ten years, but in the meantime munis and market returns are suddenly linked in a way that they never were before. It's an interesting analysis.
[Read more »]
MEDIA REVIEWS - June 1-7, 9012
Years ago, as editor of Financial Planning magazine, I and my staff created the first, and the second, and the third, and the fourth broker-dealer survey. We spent a lot of time identifying trends, comparing one year's numbers to the next, ranking the survey participants on things like increase in revenues, increase in average payout per rep, total payout per rep, and shifts in the sources of revenue.
I bring that up because there are no trends visible in the 2012 Investment Advisor BD survey; no comparisons with last year, much less rankings based on them. As you'll see from my comments below, there are still some interesting insights, but I think any magazine that collects this data year over year ought to be telling us how the BD industry is trending. Why not?
There are four real gems here. The survey of advisors, by Spenser Segal with help from Jamie Green, shows that many advisors are open to getting help from outside sources, despite the obvious conflicts of interest. Joni Youngwirth's description of the Commonwealth coaching program for affiliated reps offers a lot of good insight into what most advisors are missing in their practices. Mark Tibergien continues the Segal/Green article by noting that there are much better ways to measure costs and track them than the profession normally uses.
And the "Six Week Solution to Succession Planning" somehow manages to live up to its title. It has the clear ring of truth to it. [Read more »]
I bring that up because there are no trends visible in the 2012 Investment Advisor BD survey; no comparisons with last year, much less rankings based on them. As you'll see from my comments below, there are still some interesting insights, but I think any magazine that collects this data year over year ought to be telling us how the BD industry is trending. Why not?
There are four real gems here. The survey of advisors, by Spenser Segal with help from Jamie Green, shows that many advisors are open to getting help from outside sources, despite the obvious conflicts of interest. Joni Youngwirth's description of the Commonwealth coaching program for affiliated reps offers a lot of good insight into what most advisors are missing in their practices. Mark Tibergien continues the Segal/Green article by noting that there are much better ways to measure costs and track them than the profession normally uses.
And the "Six Week Solution to Succession Planning" somehow manages to live up to its title. It has the clear ring of truth to it. [Read more »]
MEDIA REVIEWS - May 24-31, 2012
For unknown reasons, I never received a physical copy of this month's issue of Financial Advisor, so you will notice that the page numbers are not included with this issue of Media Reviews. The table of contents will have to be your guide to the printed version.
I think pretty much everybody should skip my review and read the Bill Bengen article on retirement withdrawals, and whether the 4.5% rule still works in today's environment. It's accessible, it has great information, and it also has a fair share of wisdom. You should also check out Social Security Analyzer as a great way to add thousands of dollars to your clients' net worth simply by having it apply rules that are much too mind-bogglingly complicated for any sane person to delve into. That's why we have people like Baylor University finance professor Bill Reichenstein... [Read more »]
I think pretty much everybody should skip my review and read the Bill Bengen article on retirement withdrawals, and whether the 4.5% rule still works in today's environment. It's accessible, it has great information, and it also has a fair share of wisdom. You should also check out Social Security Analyzer as a great way to add thousands of dollars to your clients' net worth simply by having it apply rules that are much too mind-bogglingly complicated for any sane person to delve into. That's why we have people like Baylor University finance professor Bill Reichenstein... [Read more »]
MEDIA REVIEWS - May 16-23, 2012
None of the three contributions to this month's issue of the Journal are blockbusters that you will remember forever, but they're all interesting and touch on issues that you may have wondered about. One looks at which questions are most useful in a risk tolerance questionnaire that is designed to identify whether a client will be able to stay invested in the portfolio you recommend. Another looks at whether you can improve a client's retirement portfolio sustainability if you set aside one, two, three or four years of income in a cash equivalent account--eliminating some or all of the necessity to sell stocks in a down market. A third looks at two different, potentially competing, potentially complementary, ways to hedge against the risk of needing skilled nursing care in retirement.
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MEDIA REVIEWS - May 8-16, 2012
I really think that trend of wirehouse brokers leaving to go independent is finally happening--and of course it has been predicted for years with little visible results. But the gains made by Hightower, by the firm profiled in the first a high-relevance article here, by TradePMR and others suggests that something new is happening. Expect the brokerage world to redouble its efforts to squash the independent competition with its chosen pet regulator, FINRA.
The profile of Balasa Dinverno Folz is frustratingly unspecific in a lot of areas, but it shows a blueprint for a very successful growing practice: the right structure, a focus on target clients, the right incentive package. I happen to think that the new longevity annuities are going to be big before long, and Ed Slott talks about new rules when they are purchased in IRA accounts. The article on fraud and on emerging markets funds will give you a few insights you might not have had before.
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The profile of Balasa Dinverno Folz is frustratingly unspecific in a lot of areas, but it shows a blueprint for a very successful growing practice: the right structure, a focus on target clients, the right incentive package. I happen to think that the new longevity annuities are going to be big before long, and Ed Slott talks about new rules when they are purchased in IRA accounts. The article on fraud and on emerging markets funds will give you a few insights you might not have had before.
[Read more »]
MEDIA REVIEWS - May 1-7, 2012
Every year, Investment Advisor magazine names its most influential members of our community, and every year there are some head-scratchers. I get that the magazine sees broker-dealer executives as the largest category of influencers, but it seems like they either select them with some degree of randomness or rotate the nominations. I get that the regulators should be chosen, but really, how influenced are you by Mary Schapiro on a day-to-day basis?
You start scratching your head when you read that the magazine believes your practice life is rocked by the decisions made by the heir apparent as leader of the Communist party in China, or the leader of the European Central Bank. And when they include John Corzine and Allen Stanford, well, you have to hope that the editors don't believe these are your role models. I would feel a lot better about the list if the magazine would harvest all of these people for their insights, but what you get is mainly a breezy profile and a few quotes--which, to be fair, is pretty much what everybody else does too.
I liked the article by Joni Youngwirth, who is one BD executive who was NOT named to the list, but who has created a very interesting template for any firm that wants to offer its advisors user-friendly practice management training. Mark Tibergien's column will force you to look up from the work on your desk and pay a little bit of attention to your future, and Angie Herbers may be right when she says that many advisors are the biggest obstacle to progress and staff retention in their offices. After reading Tom Giachetti's column on using outside marketing solicitors, you wonder why anybody would want to take on the regulatory hassle, and Bruce Weininger's column at the end of the magazine should be read by any advisor who fears the power of the large wirehouses and banks.
[Read more »]
You start scratching your head when you read that the magazine believes your practice life is rocked by the decisions made by the heir apparent as leader of the Communist party in China, or the leader of the European Central Bank. And when they include John Corzine and Allen Stanford, well, you have to hope that the editors don't believe these are your role models. I would feel a lot better about the list if the magazine would harvest all of these people for their insights, but what you get is mainly a breezy profile and a few quotes--which, to be fair, is pretty much what everybody else does too.
I liked the article by Joni Youngwirth, who is one BD executive who was NOT named to the list, but who has created a very interesting template for any firm that wants to offer its advisors user-friendly practice management training. Mark Tibergien's column will force you to look up from the work on your desk and pay a little bit of attention to your future, and Angie Herbers may be right when she says that many advisors are the biggest obstacle to progress and staff retention in their offices. After reading Tom Giachetti's column on using outside marketing solicitors, you wonder why anybody would want to take on the regulatory hassle, and Bruce Weininger's column at the end of the magazine should be read by any advisor who fears the power of the large wirehouses and banks.
[Read more »]
